Understanding Brand Equity-Brand Asset Valuator Model(BAV model)

Brand asset valuator model(BAV) can arguably called the most extensive brand research programs ever done. Till date over 100,000 consumers across 32 countries have been interviewed. Information on more than 13,000 brands has been collected providing up to 56 different scales and dimensions of consumer perception.According to the BrandAsset Valuator model, brand health and future of any brand can be determined by collecting consumer insights in four key areas listed below

 Brand asset valuator model(BAV model):Four key  pillars of brand equity

4 Key pillars of brand equity

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  1. Differentiation

This is the starting point for all brands.This measures the degree to which the brand is seen as different from others.Has your brand attracted consumers attention more than your competitors? The starting point for all brands is differentiation. Measure this by asking questions about how often consumers have come across your brand, if they recognize your brand, and how different it is from your competitors.

As a brand matures, Brand Asset Valuator model states that Differentiation often declines. It doesn’t always have to happen. Even though brands reach maturity, with good management, a brand can continue its Differentiation. A low level of Differentiation is a clear warning that a brand is fading.

  1. Relevance

measures the breadth of a brand’s appeal.How appropriate your brand is for your consumers?Would consumers want to purchase your product or service? Is your product relevant to consumers in regards to price, convenience, and fulfilling their needs? You can determine your brand’s relevance by asking consumers how likely they would be to purchase your product or service, regardless of whether or not they have purchased your product or service in the past.Relevance alone is not  key to a brand’s success. Rather, the combination of Relevance & Differentiation determines the success. Brand Asset Valuator model shows that there is a direct correlation between Relevance and market penetration.

  1. Esteem

Esteem is the perceived quality and customer perceptions about growing popularity of a brand. Does the brand keep its assurances? The customer’s response to a marketers’ brand building activity is driven by his perception of two factors; quality and popularity. In the progression of building a brand, it follows Differentiation and Relevance. It’s the customer’s response to a marketer’s brand-building activity. Brand Asset Valuator tracks the ways in which brands gain Esteem, which helps us consider how to manage consumer perceptions.Brand Asset Valuator identifies opportunities for leveraging a brand’s Esteem

  1. Knowledge

Knowledge measures the extent of the customer’s awareness of the brand and understanding of its identity. The awareness levels about the brand and what it stands for shows the familiarity that consumers share with the brand. True knowledge of the brand comes through brand-building. When a brand has made through its Relevant Differentiation and customers come to hold it in high Esteem. Brand Knowledge is the result and represents the successful finale of building a brand. Knowledge means customer is aware of the brand and understands what the brand or service stands for. Knowledge is not a result of media Spends. High media spends against a weak idea will not yield results.

Differentiation and Relevance combine to determine Brand Strength.Brand Strength is an important indicator of future potential & performance. Relevant Differentiation is the major challenge for brands and an important indicator of brand health. These two pillars point to the brand’s future value, rather than just reflecting its past.

Esteem and Knowledge together create Brand Stature, which is more of a report on past performance.

BAV model Dynamics

According to the BAV model, it’s important to measure how differentiation, relevance, esteem, and knowledge relate to one another so you can determine your brand strength and stature. Here are the most important dynamics to note:

  • Differentiation is higher than relevance. When your brand is different, consumers are curious as to why and want to learn more. This can attract customers, get them to explore the brand, and find out if it is relevant to them.
  • Relevance is higher than differentiation. When your brand is more relevant to consumers than it is differentiated from other brands, your brand is no longer interesting or pulling in consumers. You are now competing on relevance alone, which means that consumers will only purchase your product or service based on price or convenience.
  • Esteem is higher than knowledge. When consumers hold your brand in high esteem, they respect and desire your brand because it is so well regarded. Consumers want to purchase your product or service to find out why it garners consumer loyalty.
  • Knowledge is higher than esteem. When consumers claim to already know all about your company, this can lead to problems, especially if they believe they know negative things about your brand. Consumers who think they don’t need to learn anything else about your brand have already judged it—and this means they may be looking to learn more about your competition and less about you.

BAV Model Power Grid

BAV mod

This model plots brands on a ” Power Grid ” reflecting each brand’s Strength and Stature. The Power Grid sets the strategic process by categorizing the strength or weakness of a brand. On the vertical axis we have the brand strength – its relevance and differentiation, while on the horizontal axis, the brand stature -esteem and knowledge

This grid is divided into 4 quadrants

1)Quadrant 1, brand is in the quadrant as a new brand and has newly entered the market or is an old stagnant brand with no clear focus. Brand in the quadrant 1 has brand stature and brand strength which get lower. The quadrant is divided into 2 parts a) brand which is not focused tends to be stagnant b) new brand which is better to be marked by the less differentiation, relevance, esteem and knowledge. That can improved to move brand into 2nd quadrant

2) Quadrant 2, here the company hasn’t yet to be able to realize the maximum potential from the company brand or the brand plays in market niche. In the quadrant is marked with the brand strength in the form of differentiation and some brand attribute which is relevant with the consumer needs but the lower brand stature is  low, however, the brand revenue into this quadrant is although low but having the potential to develop in the next.

3) Quadrant 3, here brand has the high income and also has the potential of high growth in the future.  However, in the quadrant 3 is divided into 2 diagonally parts, those are the leader and there is decreasing brand leader. The decreasing leader in this brand results in the high sale marked by the high esteem and knowledge as the result of building the past successful brand but currently is in a position of low differentiation and relevance which has the meaning that the company need to do some research-based innovation to stay relevant.

4) Quadrant 4, The last quadrant spells “Danger” for the brand, an indicator of eroding potential. These brands in this quadrant have failed to maintain their Relevance. If unattended, their Stature will also begin to fall. Unless steps are taken to stimulate the differentiation and relevance, these brands will lose Esteem and could ultimately fade from consumers’ consciousness

Determining your brand equity

Once you see how high or low your brand is rated in differentiation, relevance, esteem, and knowledge, you can use these measurements and relationships to assess your brand strength and brand stature. That way, you can determine your overall brand asset (what BAV model calls the overall measure of your brand’s equity).

Brand Asset Valuator is distinctive in that Y&R’s findings have been substantiated by tracking the real-world financial performance of companies. This performance shows the implications of how companies manage their brands. Brands managed properly, in accordance with Brand Asset Valuator model, have systematically demonstrated that they give, on average, higher margins, profit, growth and lower risk. Y&R’s Brand Asset Valuator data are reported as percentile rank amongst all other brands measured. This comparative metric allows for the diagnostic assessments necessary to truly benefit from the cross-category, global perspective.

Basically, brand equity comes down to this: When your brand strength and brand stature are high—or brand strength is higher than brand stature—your brand equity is at its peak ,which means you’ve got a powerful brand……….

Example of Brand Asset Valuator Model 

lets select 3 smartphone brands given below & plot them on bav power grid

bav example-selected brands

All the 3 brands are plotted in 4 parameters of differentiation, relevance, esteem & knoweledge & plotted & Combination taken as score for brand strength & brand Stature

BAV Example

By plotting brand stature & brand strength against the power grid, the current brand equity of the brand can be understood

BAV model Example

Do check out http://bavconsulting.com/ for more ….

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